March 15 (Bloomberg) -- Hainan Airlines Co. Ltd., China’s fourth-biggest carrier, surged the most in more than two years in Shanghai trading, leading gains among Chinese carriers amid signs faster economic growth is boosting travel demand.
Hainan Air jumped by its 10 percent exchange-imposed limit to 4.52 yuan for the biggest gain since November 2010 in Shanghai. Bigger rival China Southern Airlines Co. gained 3.6 percent to close at 3.77 yuan in Shanghai.
Passenger revenue, or flyers multiplied by kilometers, rose 29 percent last month because of higher demand during the week-long Chinese New Year holiday, China Eastern Airlines Corp. said in a statement earlier this week. Air China Ltd., the nation’s biggest carrier by market value, and China Southern are likely to post similar results for last month, said Zhou Meng, an analyst at Shenyin & Wanguo Securities Co.
“The industry’s outlook is also expected to improve in the upcoming peak season in the second quarter,” Zhou, who is based in Shanghai, said in a phone interview today.
Economists surveyed by Bloomberg News forecast China’s economic growth to accelerate to 8.1 percent this year, based on the median estimate. The world’s second-biggest economy grew 7.8 percent last year.
Air China surged 6.4 percent to 5.67 yuan. The airline stocks helped push the benchmark Shanghai Stock Exchange Composite Index up 0.4 percent.
The Hong Kong-traded shares of Air China rose 0.2 percent while those of China Southern climbed 2.9 percent and China Eastern’s advanced 1.5 percent.
Hainan Air yesterday said it would give investors 10 bonus shares for every 10 held. The carrier also reported profit that was in line with analyst estimates.
Investors tend to consider the issuance of bonus shares as a buying opportunity because it will make it easier to trade shares, Zhou of Shenyin & Wanguo said.
Separately, Li Jiaxiang, head of China’s aviation regulator told Shanghai Securities News that China should invest to build more airports and jet fuel prices will become more market oriented.
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